CASTROL INDIA 2019-20 Annual Report Analysis

Thu, 31 Dec

CASTROL INDIA has announced its results for the year ended December 2020. Let us have a look at the detailed performance review of the company during FY19-20.

CASTROL INDIA Income Statement Analysis

• Operating income during the year fell 22.7% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 29.4% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 27.2% in CY20 as against 29.7% in CY19.
• Depreciation charges increased by 24.2% and finance costs increased by 249.6% YoY, respectively.
• Other income declined by 4.2% YoY.
• Net profit for the year declined by 29.5% YoY.
• Net profit margins during the year declined from 21.3% in CY19 to 19.5% in CY20.

CASTROL INDIA Income Statement 2019-20

No. of Mths Year Ending		12 Dec-19*	12 Dec-20*	% Change
Net Sales	Rs m	38,768	29,969	-22.7%
Other income	Rs m	648	620	-4.2%
Total Revenues	Rs m	39,416	30,590	-22.4%
Gross profit	Rs m	11,531	8,141	-29.4%
Depreciation	Rs m	697	866	24.2%
Interest	Rs m	12	42	249.6%
Profit before tax	Rs m	11,469	7,854	-31.5%
Tax	Rs m	3,195	2,024	-36.7%
Profit after tax	Rs m	8,274	5,829	-29.5%
Gross profit margin	%	29.7	27.2
Effective tax rate	%	27.9	25.8
Net profit margin	%	21.3	19.5

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CASTROL INDIA Balance Sheet Analysis

• The company's current liabilities during CY20 stood at Rs 9 billion as compared to Rs 8 billion in CY19, thereby witnessing an increase of 12.6%.
• Current assets rose 6% and stood at Rs 19 billion, while fixed assets rose 16% and stood at Rs 4 billion in CY20.
• Overall, the total assets and liabilities for CY20 stood at Rs 23 billion as against Rs 22 billion during CY19, thereby witnessing a growth of 7%.

CASTROL INDIA Balance Sheet as on December 2020

No. of Mths Year Ending		12 Dec-19*	12 Dec-20*	% Change
Networth	Rs m	13,479	13,905	3.2
Current Liabilities	Rs m	8,404	9,466	12.6
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	21,703	23,313	7.4
Current assets	Rs m	18,355	19,436	5.9
Fixed Assets	Rs m	3,348	3,876	15.8
Total Assets	Rs m	21,703	23,313	7.4

CASTROL INDIA Cash Flow Statement Analysis

• CASTROL INDIA's cash flow from operating activities (CFO) during CY20 stood at Rs 9 billion, an improvement of 1.5% on a YoY basis.
• Cash flow from investing activities (CFI) during CY20 stood at Rs -2 billion on a YoY basis.
• Cash flow from financial activities (CFF) during CY20 stood at Rs -6 billion, an improvement of 10% on a YoY basis.
• Overall, net cash flows for the company during CY20 stood at Rs 1 billion from the Rs -2 billion net cash flows seen during CY19.

CASTROL INDIA Cash Flow Statement 2019-20

Particulars	No. of months	12	12	% Change
	Year Ending	Dec-19	Dec-20
Cash Flow from Operating Activities	Rs m	8,795	8,928	1.5%
Cash Flow from Investing Activities	Rs m	-4,483	-2,009	-
Cash Flow from Financing Activities	Rs m	-6,277	-5,643	-
Net Cash Flow	Rs m	-1,965	1,275	-

Current Valuations for CASTROL INDIA

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 5.9, an decline from the EPS of Rs 8.4 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 123.2, stands at 20.9 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 8.8 times, while the price to sales ratio stands at 4.1 times.
• The company's price to cash flow (P/CF) ratio stood at 18.6 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Dec-19*	12 Dec-20*
Sales per share (Unadj.)	Rs	39.2	30.3
TTM Earnings per share	Rs	8.4	5.9
Diluted earnings per share	Rs	8.4	5.9
Price to Cash Flow	x	14.3	18.6
TTM P/E ratio	x	15.5	20.9
Price / Book Value ratio	x	10.5	9.0
Market Cap	Rs m	141,222	124,481
Dividends per share (Unadj.)	Rs	5.5	5.5

Ratio Analysis for CASTROL INDIA

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 2.1x during CY20, from 2.2x during CY19. The current ratio measures the company's ability to pay short-term and long-term obligations.

Interest Coverage Ratio: The company's interest coverage ratio deteriorated and stood at 189.8x during CY20, from 964.8x during CY19. The interest coverage ratio of a company states how easily a company can pay its interest expense on outstanding debt. A higher ratio is preferable.

• Profitability Ratios

Return on Equity (ROE): The ROE for the company declined and down at 41.9% during CY20, from 61.4% during CY20. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

Return on Capital Employed (ROCE): The ROCE for the company declined and down at 56.8% during CY20, from 85.2% during CY19. The ROCE measures the ability of a firm to generate profits from its total capital (shareholder capital plus debt capital) employed in the company.

Return on Assets (ROA): The ROA of the company declined and down at 25.2% during CY20, from 38.2% during CY19. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Dec-19*	12 Dec-20*
Current ratio	x	2.2	2.1
Debtors’ Days	Days	5	2
Interest coverage	x	964.8	189.8
Debt to equity ratio	x	0.0	0.0
Return on assets	%	38.2	25.2
Return on equity	%	61.4	41.9
Return on capital employed	%	85.2	56.8

To see how CASTROL INDIA has performed over the last 5 years, please visit here.

CASTROL INDIA Share Price Performance

Over the last one year, CASTROL INDIA share price has moved down from Rs 166.5 to Rs 99.9, registering a loss of Rs 66.6 or around 40.0%.

Meanwhile, the S&P BSE OIL & GAS Index is trading at Rs 10,020.9 (up 8.7%). Over the last one year it has moved down from 15,269.7 to 10,020.9, a loss of 5,249 points (down 34.4%).

Overall, the S&P BSE SENSEX is down 24.2% over the year.

(To know more, check out historical annual results for CASTROL INDIA and quarterly results for CASTROL INDIA)

Read: Latest Annual Report Analysis of CASTROL INDIA